For many SMEs Brexit is proving a recruitment nightmare. Companies that rely on EU staff are finding far fewer feel welcome in the UK and so are less likely to apply to fill jobs made vacant by those already headed home.

Research from recruitment site Indeed has found that in the first three months of the year alone, searches from the EU for jobs in the UK were down nearly a fifth (18%); the sharpest drop the site has ever recorded.

The development is being keenly felt in the hospitality sector where entrepreneurs such as Sarah Heward are reliant on EU staff. The Real Food Café she owns in Tyndrum on the West Highland Way in Stirling is popular with tourists and offers more employment than can be met by the local population. This makes her dependant on the flexibility of hiring seasonal EU staff.

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“After Brexit it was like someone turned off the tap on job applications, they were down by more than a half,” she says.

“We spoke to our recruitment agent and he says it’s the same for all British companies. The East European people he specialised in placing in jobs feel less welcome in the UK now and, since the devaluation of the pound, they’d far rather be earning euros in a country they know they can settle down in if they choose.”

Heward has increased wages this month by an average of 8% to discourage people from leaving and attract more CVs from EU citizens in time for the summer season.

It is a very similar story further south in Purton, Wiltshire at The Pear Tree hotel. Co-owner Alix Young does not believe Brexit is the only reason several EU staff members are going home and fewer are applying to stay, but it plays a significant part. As a result the staff make-up at the hotel has changed markedly in just a few months.

Alix Young (centre) co-owner of The Pear Tree at Purton, with management team Anne and Tim Young. Photograph: Barbara Leatham

“In fifteen years we’d never had anyone British working in our housekeeping team but now we have three out of six, so it’s already had a massive difference,” she says.

“Our staff were really worried straight after the vote last summer so we had to sit them down and assure them that they’re still very welcome here, and that hasn’t changed. Nevertheless, we have fewer people looking to replace those leaving.”

EU talent leaving Britain is also impacting SMEs in other sectors requiring more highly qualified employees. Maxwell Scott Bags, a York-based leather accessories company, sells all over the world and Germany is one of its key markets. The company’s German marketing assistant left earlier this month and it has not been able to replace her, despite months of trying. Marketing manager, Julia Munder, herself German, says Brexit is to blame.

Nobody’s telling you to your face you have to go home, you just don’t feel as welcome any more

Julia Munder

“Our marketing assistant wanted to go home where she knew she could have a good job and consider starting a family without any fear she’d be told she could no longer stay,” she says.

“It’s been difficult for anyone like myself since the Brexit vote because nobody’s telling you to your face you have to go home, you just don’t feel as welcome any more.”

Munder explains that Brexit has led to such difficulty attracting a German national with marketing skills that, when the usual means of hiring did not work, she was forced to bring in a recruitment agency for the first time.

“We’d normally have enough speculative CVs coming in or a job ad would bring in a pile of applications,” she says. “But since Brexit it’s dried up. Even with an agency on board we haven’t managed so far to fill this key role. We offered it to two people but they turned it down for jobs they considered to be more suitable in mainland Europe.”

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In the tech industry, entrepreneur Tom Adeyoola is also finding it harder to recruit for his Metail app which lets customers try clothes on virtually. He reveals a couple of staff members have been told to “go home” by members of the public when their accents have been heard.

He points out that difficulty recruiting in the UK will simply create opportunities in other job markets. His company has already doubled staff to 60 and he intends to double again in size within two years. Whether this is in the UK or not is open to question.

“The simple truth is if I can’t hire here I’ll do it abroad at our Asian office which is about to move from Singapore to Hong Kong,” he says. “I think I’m going to have to mitigate risk by focussing on growing staff numbers abroad and I imagine I’m not the only SME thinking that way. It’s tough but I’ve offered jobs recently to EU citizens who’ve turned me down because they’ve found employment elsewhere in the EU. I need the best people so I can’t allow that to carry on.”

Ben Martin is not surprised by reports of a recruitment crisis. He is the founder of Brexit Tracker, an online research resource looking at the impact of Brexit on SMEs’ operations. The feedback has been that recruitment is in the top three of companies’ concerns, alongside developing new markets and technology.

“If you’re an EU citizen, the weakened pound means you’ve now got to earn 15% more than last year to make Britain attractive,” he says.

“So it’s not a huge surprise that people are favouring earning euros in places they feel more welcome and there isn’t the risk they could be asked to leave in two years’ time.”

He predicts this uncertainty over the UK’s future trading relationship with the EU will continue to affect British companies’ ability to hire key talent for the next couple of years while discussions continue to unfold.

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